(Adds details from analyst note, share movement)
NEW YORK, March 28 U.S. radio broadcaster Clear
Channel Communications Inc (CCU.N) said on Friday its pending
$20 billion buyout may collapse, as the banks had failed to
provide funding for the deal under previously agreed terms.
In a filing with the Securities and Exchange Commission,
Clear Channel said it had agreed with buyout firms Thomas H.
Lee Partners LP and Bain Capital Partners LLC that all closing
conditions for the deal have been satisfied.
"The company continues to be ready, willing and able to
consummate the merger under the merger agreement, which remains
in effect," Clear Channel said in the filing. "The company is
unable, however, to estimate a closing date at this time and
cautions the markets that a closing may not occur," it added.
The deal had been expected to close March 31.
The comments are expected following events this week. The
deal on Wednesday descended into litigation, with Clear Channel
and the buyout firms suing the banks, alleging they balked at
their obligation to fund the deal and hadn't stuck to
previously agreed terms.
A spokeswoman for the banks said at the time the lawsuits
were filed that they were without merit and would be contested
Clear Channel's shares fell 5 percent to $28.09 on Friday
on the New York Stock Exchange -- significantly below the
$39.20 a share offered.
In a research note Friday, Miller Tabak analyst David Joyce
wrote that Clear Channel is in "fine financial shape and is
outperforming a weak radio industry."
The company would still be a desirable acquisition
candidate if the deal collapses, or it could operate equally as
well on its own, he wrote. Joyce has a price target of $39.20
on the shares.
Clear Channel's filing noted that while the parties met on
Thursday, the six banks led by Citigroup Inc (C.N) didn't show
On Thursday, the U.S. radio operator was granted a
temporary restraining order against the banks that also include
Morgan Stanley (MS.N), Credit Suisse Group CSGN.VX, Royal
Bank of Scotland Group Plc (RBS.L), Deutsche Bank AG (DBKGn.DE)
and Wachovia Corp WB.N. That prevents them temporarily from
reneging on their funding commitments. They were to provide
more than $22 billion in financing for the buyout.
The private equity firms filed the lawsuits in New York and
Texas on Wednesday. Clear Channel joined in the Texas lawsuit.
(Reporting by Jui Chakravorty; additional reporting by Megan
Davies; editing by Jeffrey Benkoe)